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Your guide to money etiquette 

From Real Simple
updated 7:46 AM EST, Tue February 28, 2012
When it comes to matters of money, it's important to follow your ethical compass.
When it comes to matters of money, it's important to follow your ethical compass.
STORY HIGHLIGHTS
  • Clear it with the hotel staff, before bringing any of your friends to the pool
  • It's not ethical to use your student ID to get discounts when you're no longer a student
  • If an employer discovers even a modest embellishment, that new offer could be rescinded

(Real Simple) -- Get advice on how to handle sticky financial situations. 

Q: I accidentally walked out of a store without paying for an item. Must I fess up?

A: Yes, and be quick about it, says Michael Josephson, the founder of the nonprofit Josephson Institute for Ethics, in Los Angeles. If you're in the parking lot, dash back inside the store, find a manager, and come clean.

"It was an accident, so you're not a thief, but you should return the item or pay for it."

If it was your child who did the swiping, use the opportunity to be a good role model. Say, "My son took this -- I'm sorry, and he wants you to know that he's sorry, too," says Josephson. Chances are, you'll only be out the cost of the item or five minutes of your time.

What if you don't realize the mistake until you're at home? If the incident took place at a store you frequent often -- or one that you could easily return to in the near future -- bring the item (or corresponding dollar value) on your next visit.

If you are far away or won't be returning anytime soon, call and offer to mail the money. Just don't shrug off the accidental pilfering.

As Mike Siemienas, a spokesperson for Supervalu, a retail conglomerate, points out: "One thousand one hundred of our stores average approximately 20 million weekly customers, so if everyone walked off with a 50-cent item without paying for it, we would lose $10 million a week -- meaning higher prices for everyone."

Q: Can I buy something in another state and ship it to myself to avoid paying sales tax?

A: If you shop at a brick-and-mortar store in one of the five sales tax--free states -- Alaska, Delaware, Montana, New Hampshire, and Oregon -- feel free to make your purchases, then take the goods with you or have them shipped.

It's legal and appropriate, says Lauren Bloom, a business-ethics consultant in Springfield, Virginia. But take note: If you habitually engage in such sprees, you might end up owing some or all of those sales-tax savings to your home state.

"In Missouri, for example, residents must report tax-free purchases that total more than $2,000 annually and pay at least a 4.2 % use tax on them," says Michael Brennan, the owner of the Brennan Group, a tax-consulting firm in St. Louis. (Check with your state's department of revenue for its policy.)

If you skip reporting and paying, you might not get caught, but your behavior is unethical, says Bloom. And if scores of others follow suit, your state could be forced to raise its sales tax in the future.

When it comes to shopping online, you're entitled to buy tax-free "as long as the retailer has no physical presence in your state -- meaning salespeople, storefronts, a warehouse, an office, or outlets," says Brennan.

But what if you have a pal in Montana? Can you have your purchase shipped to her house, then have her send it along to you? In theory, you can, says Bloom: "But her home is not the final destination, so it's still an ethical breach." And by the time you add in the extra shipping, you may not save enough to make it worthwhile.

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Q: If my child doesn't go to college, must I give her the money I saved for it?

A: There are a few things to think about if you're in this situation. First, if you make it clear to your child that the savings were intended for academic use only, then you can ethically keep the money -- although ideally you would have previously disclosed the purpose of the funds to her, says Robert Steele, the director of the Janet Prindle Institute for Ethics at DePauw University, in Greencastle, Indiana.

But bear in mind that if your plan for the money was to give your child a good start in life, it could still help her achieve that. For example, she could use it to buy equipment for a vocation she wants to pursue.

Just be sure to look into the financial ramifications of turning over the money, says Wayne Van Heuvelen, the president of Horizon Consulting and Investment Services, in Des Moines.

If the money is in a 529 plan, a tax-advantaged savings account, you could get dinged for taking it out for purposes other than paying for college, junior college, or trade school. "Unqualified withdrawals in Iowa, for example, carry a tax on the contribution amount and interest earnings, plus a 10 percent penalty at the federal level," says Van Heuvelen. (Rules vary, so check your fund's website.)

And remember: Although your daughter may not want to attend college now, she might feel differently in a few years. "Hang on to the cash for a bit, and continue having discussions about school," says Diane Swanson, the chair of the Business Ethics Initiative at Kansas State University, in Manhattan, Kansas.

What if she never uses the money? Usually you can transfer the funds tax-free to other family members who are pursuing higher education.

Q: Can I bring friends to the pool at the hotel where I'm staying even though they're not guests?

A: This is a reasonable request, but to avoid making the wrong kind of splash, clear it with the hotel first, says Diane Swanson, a professor of business ethics at Kansas State University, in Manhattan, Kansas.

Most likely the hotel will agree, unless it's peak season and poolside real estate is at a premium. You're a paying customer, and they want to keep you happy -- plus, extra bodies often result in additional food and drink sales.

To remain in the staff's good graces, ask about the hotel policy when making your reservation. And keep in mind that you'll have better luck getting the green light for one or two people than for your entire extended, Marco Polo-playing family.

Another reason to keep your swim date on the up-and-up? According to Nancy Kern, an assistant vice president of marketing for Destination Hotels & Resorts, some hotels ask people for their room numbers before they hit the pool deck or request that nonguests buy a day pass for privileges (often about $25) -- which would make it a bit difficult for your friends to dive right in.

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Q: Can I bring my own food and drink into a movie theater? 

A: Checking out the concession-stand offerings is often a total horror show: Six dollars for gummy bears? Are they made of pure gold?! But sky-high prices don't justify sneaking in treats, says David Callahan, the editor of CheatingCulture.com, an online ethics resource.

"As a guest, you should obey the rules of the establishment," he says. A bar that serves food wouldn't allow you to haul in your own nachos to eat with its margaritas. Similarly, cinemas expect you to cough up for their goodies when you're on their turf. It could be argued that the theaters are guilty of extorting a captive audience. In this age of $10 tickets, going to the movies isn't a cheap proposition to begin with.

Also, "it's apparent that theaters mark up popcorn and other snacks to near criminal levels," says Jeff Yeager, the author of "The Cheapskate Next Door" ($13, amazon.com).

But it's worth remembering that cinemas make about 40% of their revenue from the sale of food and drinks.

"If everyone brought their own treats from home, the price of tickets could increase even more dramatically," says Callahan. Talk about scary.

Q: Can I use my student ID to get discounts even though I'm no longer in school?

A: Like many alums, you may look back wistfully on all those half-price pitchers of beer and cheap museum tickets you scored during college, courtesy of your student ID. Who can blame you?

But no matter how much you miss those deals, it's not ethical to pretend to be someone you're not. Student discounts are designed to serve a demographic that typically lacks extra spending money.

By trying to save a few bucks as a graduate, you run the risk of hurting actual students in the process. Proprietors that discover their policy is being abused may change or eliminate it altogether, denying it to those who need it, says Jen Day Shaw, an assistant vice president and a dean of students at the University of Florida in Gainesville.

If you really want a bargain, just ask for one. "Say, 'I have this ID, but I'm no longer a student. Would you be able to give me a lower price, anyway?' " says Robert Steele, a professor of journalism ethics at DePauw University, in Greencastle, Indiana. With any luck, the merchant will cut you a (price) break, regardless of your enrollment status.

Q: Is it acceptable to leave different amounts of money to my children when I die?

A: It's a touchy topic, but, yes, you can divide your estate however you wish, according to Lauren Bloom, an ethics consultant in Springfield, Virginia. There are plenty of valid reasons to leave more to some of your offspring than to others.

Maybe one has a brood of five to support while another is childless, or one makes six figures while another barely scratches rent together. Additionally, says Bloom, "it's perfectly ethical to consider your individual relationships with your children when divvying up the goods."

Perhaps one child helped support you for a time, so you feel as if she deserves more. That said, just because it's ethical to divide your estate as you please doesn't mean that it will be easy. Hurt feelings and family feuds may ensue unless you're up-front with your children -- ideally at the time you draw up your will.

"Have a conversation or write them a letter explaining why you made this decision," says Teresa McDowell, a family therapist and the department chair of counseling psychology at Lewis & Clark College, in Portland, Oregon.

Reassure them that it's a financial consideration and that you still love them, no matter what. And remember: Money isn't the only valuable thing that you can bequeath to your children. "Give meaningful objects, like family heirlooms and mementos, so that every child feels cared for," says McDowell.

That way, your final message will be a loving one.

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Q: Can I check up on my spouse's credit-card and bank-account balances?

A: Well, that depends. Do you suspect your spouse of acting in a fiscally irresponsible manner and running up massive debts? Or, worse, committing fraud or some other misconduct?

If so, says Anita L. Allen, a professor of ethics and law at the University of Pennsylvania, then it's acceptable to pry. If he maxes out a credit card on a joint account, for example, you're as legally responsible as he is for paying off the debt.

But if you're just curious about his spending, you must ask his permission before you peek at his accounts. Hopefully, he'll be open to this. And if he balks? Don't think that you can just help yourself to his online statements, even if you know his log-in information.

"Ethically, you have the right to know, but using his password to access the information without his consent is a form of identity theft," says Allen.

Q: Can I lie about my current salary on a job interview?

A: It's certainly tempting to exaggerate in the hopes of getting bumped up to the next pay bracket. And about one in six job seekers has done just that, according to a study done by the career website Vault.com.

But you shouldn't, says John Hasnas, an associate professor of business ethics at Georgetown University, in Washington, D.C. "Even though you don't work for the person conducting the interview, you're still obligated to be ethical," he says. "Plus, how would you feel if the employer lied to you about the salary?"

Also, he adds, it's inappropriate to ask someone to make a judgment based on false information or suggest that a company needs to pay an inflated amount to retain your services. If that's not enough incentive to tell the truth, realize this: Chances are you won't get away with lying, says Patrice Rice, the president of Patrice & Associates, a recruitment agency in Dunkirk, Maryland.

Most businesses verify new-hire information using W-2 forms or pay stubs, and if an employer discovers even a modest embellishment, that shiny new offer could be rescinded. (If you include a bonus or a projected raise in your quoted figure, mention it so the math adds up.)

To get more zeros added to the end of your salary without bending any ethical rules, explain the circumstances that may have reduced your income -- a pay freeze, an organization that doesn't pay the market rate -- and why you deserve a jump.

Rice suggests you say, "I'm looking for career growth and hoping that additional responsibilities will bring more earning potential. I hope this is that opportunity." You'll enjoy the bigger paycheck even more when it comes with good karma.

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Q: If I'm invited to a merchandise party at a friend's house, do I have to buy something? 

A: The first question is: Should you go at all? If you know there's no way that you'll buy another piece of Tupperware (check out the company's website beforehand to determine what merch might be available), skip the event.

But if there's a chance you might buy something, the only rule is to attend with an open mind. "If you go with the attitude 'If there's anything I like, I will buy it. If not, I won't,' that is very different than if you go with the intention of not buying anything," says Marianne Jennings, a professor of legal and ethical studies at Arizona State University in Tempe and the author of "The Seven Signs of Ethical Collapse" (St. Martin's Press, $26, amazon.com).

You are not obligated to purchase anything. If you choose not to buy, simply thank your host for her hospitality -- no elaborate apologies about budget tightening or overcrowded cabinets required. It's not always comfortable to be the only one not pulling out a checkbook, but you have no reason to feel guilty.

Q: My neighbor lent me his lawn mower and it broke. Must I pay to fix it?

A: If you borrow something and it conks out on your watch, you're obligated to cover the cost of the fix, even if the item is old, says John P. Langan, a professor of philosophy at the Kennedy Institute of Ethics, at Georgetown University, in Washington, D.C. Lawn-mower repair shops charge an average of $50 to $75 an hour, according to Consumer Reports. (It cuts, we know.)

And if the machine can't be saved? Make a reasonable offer -- say, $100 -- toward the cost of a new one, says Graham Phaup, the executive director of the Institute for Global Ethics, a nonprofit in Rockland, Maine. Your friend may not take you up on the offer, but he will probably appreciate the gesture.

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Q. My late grandfather's belongings are being divided among family members. Should I offer to buy any valuable pieces that I want?

A. Yes. Unless the deceased specifies otherwise, the executor of the will usually distributes smaller items among the heirs equally.

So if you covet something that's worth a great deal (a grand piano, an oil painting), you should offer to pay the estate its fair-market value, says Jack Marshall, president of Pro-Ethics, an ethics training and consulting firm in Alexandria, Virginia.

Of course, your relatives might not take you up on your gesture. But if they do, consider hiring an appraiser to determine the item's worth. Emotions tend to run high in situations like these, and people can have a sentimental attachment to certain objects, says Marshall.

If you compensate the estate for the item, no one will feel cheated and you can enjoy that vintage rug guilt-free.

Q. My young daughter received money as a gift. Can I decide how she spends it?

A. Most children under the age of 10 need adult guidance to determine what to do with their cash, says Lynnette Khalfani-Cox, a coauthor of "The Millionaire Kids Club" book series on financial responsibility.

If the amount is nominal -- say, under $15 -- have her save half and spend half. If the gift is more substantial, consider it an opportunity to teach money management.

Suggest splitting the funds four ways: Have her spend one-fourth, save one-fourth for an item or experience she can't afford right now but may be able to in the future, give one-fourth to a good cause (a church collection or a school fund-raiser), and put one-fourth in an interest-accruing account.

Once she's in middle school or beyond, let her decide how to use the money -- as long as the gift doesn't exceed $100, in which case you may want to weigh in. If she fritters it all away and regrets her choice later on, chalk it up as a learning experience.

Q: I'm selling my home. Must I tell the buyer that the stove is on its last legs?

A: If you lead potential buyers to believe that an appliance is in working condition when it's not, you're being deceptive, says Jack Marshall, president of ProEthics, an ethics training and consulting firm in Alexandria, Virginia. "Just think," he says. "Wouldn't you want a person selling you a house to be totally forthright?"

What's more, in 45 states and the District of Columbia, sellers are sometimes required to fill out a disclosure form listing any major defects of the property, including any appliances that come with the purchase. Fudge the facts and you may be in violation of the law. (Check with your real estate agent to learn your state's provisions.)

Even if you aren't legally bound to complete such a questionnaire, there's still plenty of incentive to speak up: If you don't disclose any problems and the home inspector finds one, this can prolong or even jeopardize your closing. However, if you act in good faith, your buyer is more likely to do the same.

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